WikiLeaks: US pushed UK to sanction Iranian banks

Cables from 2007, 2008 show US view that Britain setting "poor example" for other countries with Iranian banks operating in London.

Gordon Brown to resign -distant 311.
(photo credit:Associated Press)

US pressure on the UK to "crack down" on Iranian banks operating in Britain in response to Teheran's failure to disclose information on its nuclear activity were detailed in secret US diplomatic cables released by WikiLeaks on Wednesday.

A cable from November 2007 from the US Embassy in London describes then-UK prime minister Gordon Brown and then-foreign minister David Miliband "pressing aggressively for tough new EU measures, strengthening its
public rhetoric, and using financial oversight to quietly scrutinize
Iranian banks operating in the UK."

The cable describes US and UK goals on Iran as being "in sync," but suggests Washington push the British further to "ratchet up the pressure on Teheran."

The document discusses US efforts to convince Britain to push
legislation which would give them legal authority to freeze assets
based on proliferation activities alone.

"We have asked them whether they plan to propose legislation similar to what they have for terrorist activity."

The cable discusses UK reticence at taking hardline actions against
Iranian-backed banks, claiming "it cannot go public with its efforts
against the banks without risking political backlash for singling out
one country's commercial assets over another's."

The British were also described as speaking of the importance of
"unified international measures" as opposed to purely British sanctions
because of the UK's image in Iran as "the original Great Satan."

In subsequent cables from May 2008 the US showed some disappointment at the UK's lack of action taken against Iranian banks operating in Britain.

"The UK is setting a poor example for Persian Gulf and East Asian
governments who point to the existence of several Iranian banks in
London, " one cable reads.

US diplomatic officials claimed the UK Treasury was worried about
harming Britain as a major banking center in the world, and maintaining
international finance as a major contributor to the UK Gross Domestic
Product. Brown and the Foreign Office were described as
more supportive of "robust action against Iran," as opposed to the UK
Treasury.

The cable speaks of the necessity to convince the UK of the importance
of the symbolism of cracking down on Iranian banks in the UK despite
British concerns about the legality of actions against the London
branches of Iranian-backed banks, the proportionality of punishment
against the subsidiaries for the sins of the parents, and "whether
domestic action could actually accomplish our goals."

"They are just now warming to the idea that the symbolism of shutting
banks or severing domestic branches' ties to Teheran could have a
powerful effect," the cable reads.

The cable suggests a plan of action for further pressuring the British to crack down on Iranian banks.

Making "an appeal to British pride of principled, global leadership, as
well as a further explanation of the risks of inaction, could work,"
states the cable.